Saturday, August 29, 2009

Weekly Technical View by Tanmay G Purohit:
Nifty (4732) rose 4.49% this week after taking repetitive support around 4350 in previous week. Nifty has hit new 2009 high at 4743 but Sensex is yet to cross its yearly high 16002 which may happen next week. IIP data was positive at 7.8% and 1st Quarter GDP will be announced on 31 August which will be watched keenly. Global markets are giving support to our markets too and for time being it seems that China worries have been put aside by market players but one should be cautious about that aspect as it may come back to haunt global markets some time in future once again.Rainfall activity is 25% below normal for period 1 June to 26 August. IMD predicts better rainfall next month but expects the whole season activity lower by 20% compared to average which would make it the worst monsoon in 4 decades i.e. since 1972 and it has put our crops and power on risky grounds.
Nifty for next week looks to reach 4790 which is 61.8% retracement of whole fall from 6357 to 2252 and above that levels near 4900-5000 can be possible. More volumes and participation is necessary for indices to march ahead, in case Nifty continues sluggish movement, it will fall on its own weight. As we are trading in new yearly high territory, trading interest should rise and investors need to be cautious with penny stocks as those can easily catch you on wrong foot. Be in such stocks that you are perfectly comfortable to hold even in longer term.

Supp 4642/4573/4450 Res 4793/4872/4994

Last Week Recap Of Technical View:
Nifty (4528) fell just 52 points week on week as for most of the week it remained in a very tight range between 4350 and 4500 but closed with strong gains on Friday. The rainfall for the country as a whole during this year’s monsoon has been 26% below the Long Period Average, down from 29% deficit last week, which means rains have improved this week, though not out of the woods fully. Nifty has tested 4350-4400 area on all days of this week but never broke through which has started a pullback rally. This week will be having derivative expiry for August and if Nifty crosses 4600 on closing basis, even bearish H&S will be negated which will give way to good amount of short covering. Nifty in that case may even touch near 4900-5000 levels in days to come. Caution advised if now Nifty breaks 4400. 

Supp 4475/4395/4255 Res 4620/4668/4790
Stocks looking positive - ABB, CAIRN, HCC, IVRCL INFRA, SINTEX, TATA COMM

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